NEW YORK (Reuters) - U.S. stocks barely budged on Wednesday as stalled "fiscal cliff" negotiations gave investors little reason to keep buying following the best two-day rally for the S&P 500 in a month.
General Motors
Talks on avoiding the tax hikes and spending cuts that are set to come into effect in the new year are at a standstill amid a Republican plan to vote on extending tax cuts for all but those making $1 million or more, senior administration officials said.
President Barack Obama said he is still optimistic a deal is possible and that he would like to get it done before Christmas.
Investors are concerned that the fiscal cliff could send the U.S. economy back into recession, though most expect an agreement will be reached eventually.
Investors are positioning for a possible retreat once a deal is announced as market participants may choose to sell on the news after the recent run-up, said Alan Lancz, president of Alan B. Lancz & Associates Inc, in Toledo, Ohio.
If expectations of a deal start to buoy the market, "we'd be more inclined to take profits than chase these valuations now," Lancz said.
The Dow Jones industrial average <.dji> slipped 14.45 points, or 0.11 percent, to 13,336.51. The Standard & Poor's 500 Index <.spx> shed 3.06 points, or 0.21 percent, to 1,443.73. The Nasdaq Composite Index <.ixic> added 1.75 points, or 0.06 percent, to 3,056.28.
Markets have been lifted in recent weeks by any signs that an agreement between policymakers over the budget may be reached, with banks and energy shares - groups that outperform during periods of economic expansion - leading gains.
The S&P 500 added 2.3 percent over the past two sessions, the first time it has marked two straight days of 1 percent gains since late July. Still, trading has been light ahead of the holidays, and with investors' focus on the budget talks.
Defensive sectors led the downside on Wednesday, with the S&P utilities sector index <.gspu> slipping 0.5 percent.
Gains in technology shares boosted the Nasdaq after Oracle
Knight Capital Group Inc
An index of housing stocks gained 0.2 percent after data showed homebuilding permits touched their highest level in nearly 4-1/2 years in November. The PHLX housing index <.hgx> has surged nearly 70 percent this year as the housing market has turned the corner.
(Additional reporting by Ryan Vlastelica; Editing by Jan Paschal)
Wall Street trades flat after two-day rally, GM jumps
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Wall Street trades flat after two-day rally, GM jumps
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Wall Street trades flat after two-day rally, GM jumps
